Since the TC Heartland decision in which the Supreme Court ruled that the “residence” prong in the patent venue statute, 28 U.S.C. § 1400(b), refers only to the state of incorporation and not the definition conferred in the general venue statute, § 1391, parties and courts have focused attention on interpreting the alternative basis for venue under the statute: “where the defendant has committed acts of infringement and has a regular and established place of business.” TC Heartland v. Kraft Foods Group Brands, 137 S. Ct. 1514, 1516 (2017). Of particular interest is how courts have ruled on what constitutes “a regular and established place of business.” In September 2017, the Federal Circuit clarified that a “regular and established place of business” must meet three general requirements: “(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant.” In re Cray, 871 F.3d 1355, 1360 (Fed. Cir. 2017). First, there must be a “physical place,” i.e., a “physical, geographical location in the district from which the business of the defendant is carried out.” Id. at 1362. The Court defined a physical place as a “building or part of a building set apart for any purpose.”...
Author: Charles H. Chevalier
Post-Alice Plaintiffs Beware: The Northern District of California Awards Attorneys’ Fees in Exceptional Case
Abstract ideas are not patentable pursuant to 35 U.S.C. § 101. And, in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) the Supreme Court set forth a framework to determine whether a patent is directed to an unpatentable abstract idea. Following Alice, defendants frequently move to dismiss patent infringement actions based on Section 101. That is exactly what recently happened in Cellspin Soft, Inc., v. Fitbit, Inc. in the Northern District of California. In that case, the 14 defendants filed a joint motion to dismiss pursuant to Section 101, arguing that the patents were directed to the “abstract concept” of acquiring, transferring, and publishing data and that the claims recited only “generic computer technology” to carry out the abstract idea, and thus lacked a requisite “transformative step” which would render the abstract idea patentable. The District Court agreed and entered judgment in the defendants’ favor. Following their successful motion to dismiss, the defendants moved, again successfully, for attorneys’ fees under 35 U.S.C. § 285. In patent infringement actions, courts have discretion, pursuant to Section 285, to award attorneys’ fees in an “exceptional case.” And, the district court found that the Cellspin case was just that. In considering the defendants’ motion for fees, the district court acknowledged that the plaintiff’s claims lacked...
NJ District Courts Continue to Enforce the Disclosure Requirements Regarding Contentions Pursuant to New Jersey’s Local Patent Rules
We previously reported in February 2014 and June 2014 that New Jersey District Court Judges will enforce the District of New Jersey’s Local Patent Rules’ contention disclosure requirements and bar parties from making arguments that were not properly disclosed in their contentions. Consistent with those rulings, in a recent opinion, in Impax Labs., Inc. v. Actavis Labs FL, Inc., Judge Chesler barred one of Actavis’s infringement arguments made during summary judgment as untimely because the argument was not sufficiently disclosed in its infringement contentions. In its opposition brief, Impax argued that Actavis raised new non-infringement arguments based on the pharmacokinetic profiles of its proposed generic product. Actavis claimed that its generic product did not meet claim limitations involving a “maximum concentration” limitation or a “40% fluctuation” limitation for two subsets of asserted claims. Upon review of Actavis’s contentions, the court found that Actavis did sufficiently disclose its non-infringement argument in regard to the “maximum concentration” limitation, but that it did not sufficiently disclose its non-infringement argument regarding the “40% fluctuation” limitation. The court found that Actavis’s non-infringement contentions regarding the “40% fluctuation” limitation stated that “there is no evidence that its products ‘result in a levodopa plasma concentration’ meeting the 40% fluctuation limitation.” Yet, in its summary judgment motion, Actavis expanded that argument by providing a...
We recently reported on the Federal Circuit’s holdings in Acorda Therapeutics, Inc. v. Mylan Pharm. Inc. and AstraZeneca AB v. Mylan Pharm., Inc., where it held that Mylan was subject to jurisdiction in Delaware because “Mylan’s ANDA filings constitute formal acts that reliably indicate plans to engage in marketing of the proposed generic drugs.” Earlier this month, the first decision from the District of New Jersey District applying the Federal Circuits ruling was rendered. In Helsinn Healthcare S.A., et al. v. Hospira, Inc., No. 15-2077 (MLC), 2016 U.S. Dist. LEXIS 45826 (D.N.J. April 5, 2016), Judge Mary L. Cooper held that sufficient minimum contacts is to find specific jurisdiction is established by the fact that Hospira filed an ANDA seeking to market a generic version of Helsinn’s Aloxi® product that if approved, the marketing of will take place in New Jersey.
Last week the Federal Circuit handed down one of its more anticipated decisions regarding jurisdiction in cases brought under 35 U.S.C. § 271(e)(2) (aka Hatch-Waxman or ANDA litigation). In its holding, the Federal Circuit stated that a “[defendant’s] ANDA filings and its distribution channels” are enough to “establish that [the defendant’s] plans to market its proposed [ANDA product in the forum state]” are enough to meet the minimum-contacts requirement to establish jurisdiction. It further held “there is no substantial argument that considerations of unfairness override the minimum-contacts basis for [the forum state’s] exercise of specific personal jurisdiction over” the defendants. This holding is much broader than the underlying district court rulings and limited the analysis to specific jurisdiction without addressing the underlying general jurisdictional questions.
In 2005, the Federal Circuit established the framework for the construction of patent claim terms. In its landmark holding in Philips v. AWH Corp., the Federal Circuit stated that “words of a claim ‘are generally given their ordinary and customary meaning . . . [and] that the ordinary and customary meaning of a claim term is the meaning that the term would have to a person of ordinary skill in the art . . . .”
In today’s digital age, cloud computing has lowered the barrier of entry into many marketplaces by providing network access to a shared pool of configurable computing resources. Cloud services allow business to forego upfront capital costs on servers, network infrastructure, and software allowing companies to focus on establishing and differentiating its business instead of worrying about its IT resources. Additionally, it is typically a “pay as you go” service meaning that businesses can scale up or down as needed in real time. However, entrusting a third-party as the sole source of the company’s network, software, and data storage functionality puts the company at risk of losing these services should the provider enter bankruptcy.
We previously reported on the potential impact that the Supreme Court’s decision in the case of Kimble v. Marvel Enterprises, Inc. may have on patent licensing terms. On June 22, 2015, the Supreme Court, basing its decision on stare decisis, upheld Brulotte which had barred royalty payments on post patent expiration activities. Kimble et al. v. Marvel Ent., LLC, 576 U.S. __ (2015). The Supreme Court, referencing the Brulotte court’s opinion, found that such post expiration royalty provisions “conflict with patent law’s policy of establishing a ‘post expiration . . . public domain’ in which every person can make free use of a formerly patented product” Kimble, 576 U.S. at _ (slip op., at 5) (quoting Brulotte v. Thys Co., 379 U.S. 29, 33 (1964). In upholding that ruling, the Supreme Court reasoned that “stare decisis carries enhanced force when a decision . . . interprets a statute. Then, unlike in a constitutional case, critics of our ruling can take their objections across the street, and Congress can correct any mistake its sees.” Id. at _ (slip op., at 8).
As licensing professionals await the decision of the Supreme Court in the case of Kimble v. Marvel Enterprises, Inc., which is widely believed to determine the future viability of the fifty year old decision of the Court in Brulotte v. Thys Co., it may be useful to consider the practical impact such a decision may have. The Brulotte decision held that use of the monopoly power of a patent to exact royalty payments on post expiration activities was a per se violation of the anti-trust laws. The reasoning was based on an analogy of the Court’s earlier prohibitions against tie-in arrangements where the use of a patented article required the purchase of an unpatented article. The patented invention was considered to be in the public domain upon expiration and thus free to use by all.
The Federal Circuit recently addressed the issue of whether Patent Term Adjustment (“PTA”) can be reduced under 35 U.S.C. § 154(b)(1)(C) by conduct that does not actually cause delay in the conclusion of prosecution. Section 154(b)(1)(C) provides that PTA “shall be reduced by a period equal to the period of time during which the applicant failed to engage in reasonable efforts to conclude prosecution of the application.” The USPTO has interpreted the statute to mean that conduct that did delay or that could potentially delay the examination of a patent applications should be sanctioned. In Gilead Sciences Inc. v. Lee, Gilead Sciences, Inc. (“Gilead”) contested the USPTO’s interpretation and argued that the statue required actual delay in the conclusion of prosecution. The Federal Circuit held that Congress’s intent in enacting the statute was “to sanction not only applicant conduct or behavior that result in actual delay, but also those having the potential to result in delay irrespective of whether such delay actually occurred.”